The price of goods leaving factories grew at its slowest for more than 18 months in October as falling global energy prices brought respite to manufacturers, according to government figures released yesterday.

With exporters struggling to cope with the strength of sterling, the Office for National Statistics said output prices were 1.7% higher last month than a year earlier, down from 1.8% in September.

Cheaper fuel and raw materials helped manufacturers curb price increases, with crude oil down by almost 6% in October and by just over 7% on the same month a year earlier. Prices paid by industry for fuel and raw materials were up by 3.8% year on year in October, well down on the 13.6% inflation rate recorded six months earlier.

City analysts warned, however, that the drop in crude oil to below $60 a barrel last month was masking inflationary pressures elsewhere in the economy. Excluding food, drink, tobacco and petrol products, industry's output prices were 2.5% higher in October than a year earlier, up from 2% in the year to September.

Paul Dales, UK economist at Capital Economics, said: "October's producer prices data provided some evidence that core price pressures have started to increase, as the MPC has feared." He said it was too early to say whether this was the start of a "meaningful trend".

Separate data from the Department for Communities and Local Government showed growing inflationary pressure in the housing market. The cost of a home was up by 8% in the year to October, the strongest rate of growth in 18 months. Housing inflation has been rising steadily from a trough of 3.3% in March, with the official data mirroring lender surveys.